It seems warm in here – retails boiling frog moment

Myers CEO – gone
DJ’s CEO – gone
Marks & Spenser – shuttering 10% of network
House of Fraser – in crisis mode
Every specialist electronic chain worldwide – gone (almost)
Toys were Us worldwide – gone
Specialty Fashion Chain – sold for a fraction
Lowy’s – collected their money an ran
Discount department stores – crisis worldwide
Godfrey’s – acquired by 99 year old founder and dismisses entire board within 24 hours

We certainly live in interesting times. In my opinion we are now at or very close to a tipping point. As more volume moves online to an increasingly fragmented distribution chain, managing a traditional retail business will become increasingly more difficult.

If retail as we know it is to survive the model must change. The key input costs of rent, staff, inventory and advertising need a step change downward to stay in line with reduced sales and reduced margins. Nothing short of a radical new model will avert being boiled to death.

The holy grail here is cracking the browsing nut. Online is excellent at delivering info and facilitating the sale. What it is not good at is showing you what you don’t know. AI is getting better at identifying what you might like based on your previous behaviour, but discovery is a concept not well catered for in an online world.

Maybe it’s time to let the amazons and Alibaba’s to take control of the logistics channels and turn back to an Argos showroom model,but on a much bigger scale. Retailers manage the customer facing aspects while manufacturers fund the inventory sitting in the Amazon warehouses. Instant gratification takes a back seat but maybe it is a model that can be sustained.

It sure is hot in here.

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